Politichaos

Resolving the Ruckus

Proposition 70

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Greenhouse Gas Reduction Reserve Fund

initiative constitutional amendment

FAILED

Official Summary

Beginning in 2024, requires that cap-and-trade revenues accumulate in a reserve fund until the Legislature, by a two-thirds majority, authorizes use of the revenues. Fiscal Impact: Beginning in 2024, potential temporary increase in state sales tax revenue, ranging from none to a few hundred million dollars annually, and possible changes in how revenue from sale of greenhouse gas emission permits is spent.

Notes

Bottom line: changes allocation of moneys from cap and trade system from simple majority to 2/3 vote.

  • Creates The Greenhouse Gas Reduction Reserve Fund (GGRRF) to hold funds from the auction or sale of cap-and-trade allowances. Current funds are deposited in the Greenhouse Gas Reduction Fund (GGRF), used for state and local programs. The state can spend money from GGRF when passed with majority votes.

  • Funds may be used from the new GGRRF with 2/3 vote of Legislature starting in 2024. This is contrasted with current allocation from GGRF that only requires a majority.

  • Background on Cap and Trade: Under this program, which began in 2012, the state issues a limited number of permits to emit greenhouse gasses (GHG). Certain companies responsible for large amounts of GHG emissions must obtain a permit for each ton of GHG they emit. The state gives about half of the permits away to certain industries for free and sells the other half at auctions. A recent state law allows cap-and-trade to operate in California through 2030.

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